Hong Kong and China markets rebound as investors make most of Wuhan coronavirus-led declines to increase positions
- Tuesday’s 2.8 per cent plunge in Hang Seng Index was ‘a bit too much’, analyst says
- China markets boosted by powerful rally in technology sector
The Hong Kong and mainland China markets rebounded on Wednesday, as investors took the opportunity to increase their positions after a huge plunge on Tuesday on concerns about the spreading Wuhan coronavirus.
In Hong Kong, the Hang Seng Index rose 1.3 per cent to 28,341.04, recording its biggest daily gain in nine sessions. On the mainland, the Shanghai Composite Index reversed early losses to close 0.3 per cent higher at 3,060.75. The Shenzhen Component gained 1.1 per cent and the ChiNext Index climbed by 1.4 per cent.
Investors in Hong Kong bought the dip after Tuesday’s huge declines, as the market carefully gauged how big an impact the virus outbreak could have on the mainland China and Hong Kong economies, according to Castor Pang Wai-sun, head of research at Hong Kong-based brokerage Core Pacific-Yamaichi.
“The 2.8 per cent plunge in the Hang Seng Index on Tuesday was indeed a bit too much, leading to some investors taking the chance to increase their positions,” he said. Hong Kong stocks recorded their worst day in over five months on Tuesday.
“The market is already expecting the virus will spread … the question is whether there will be bad news that escalates it to a whole new level to justify a significant fall in the market,” he said.
Chinese authorities on Wednesday confirmed nine people had died from the illness, while 440 people had been infected. All of the deaths were reported in central China’s Hubei province, where the virus first spread from the city of Wuhan.